Identify and explain the externality associated with a vaccine that is developed to address the COVID-19...

Identify and explain the externality associated with a vaccine that is developed to address the COVID-19 pandemic

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Expert Solution

It can be mentioned that the externality associated with the development of a vaccine for coronavirus is a positive externality in this is because when you developed the vaccine and when it is used it is not only helpful for the private benefit but it also generates the social benefit with the Welfare of the people increases on the whole and that is the reason why in order to improve the production of vaccine and promote the positive externalities such that the optimal social benefit is equal to marginal cost as a result of which the supply must increase with which the supply should shift to the right and that is the reason why governments are actually subsidizing the development of vaccine for various companies regarding raw materials and Technology so that this comes in the market as soon as possible and provide the benefit to the society so that the economy can be stimulated back to normal on the whole.

Rahul Sunny answered 1 year ago

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